HomeMy WebLinkAboutItem 07 PacificSource ContractAGENDA ITEM SUMMARY Meeting Date:
Meeting Type:
Staff Contact/Dept.:
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S P R I N G F I E L D
C I T Y C O U N C I L
Council Goals:
ITEM TITLE: Employee Health, Vision, and Prescription contract renewal.
ACTION
REQUESTED:
Authorize City Manager to execute 2024 renewal contract for self-funded medical,
prescription, vision, stop-loss, and third-party administrative services.
ISSUE
STATEMENT:
Existing contract with PacificSource Health Plans for third-party administration
and stop-loss coverage expired on December 31, 2023. The contract exceeds
$100,000 and requires Council approval.
ATTACHMENTS: 1: Pacific Source Agreement
DISCUSSION/
FINANCIAL
IMPACT:
The City provides a comprehensive self-funded health, prescription, and vision
insurance plan for eligible employees, dependents, and retirees.
PacificSource is the City’s third-party administrator (TPA) for self-funded
medical benefits. The TPA fees are increasing by $24 per employee annually.
PacificSource also provides the City’s stop-loss insurance and for many years
the City paid all claims valued less than $150,000 and purchased stop-loss
insurance to cover claims in excess of $150,000. Due to favorable claims
experience the decision was made to increase the stop-loss insurance to
$175,000 resulting in a savings of $120 per employee annually.
Overall renewal rates are favorable and staff recommends Council authorize the
City Manager to sign the benefit renewal contract with PacificSource.
1/29/2024
Regular Meeting
Jamie Iboa
541-726-3724
Consent Calendar
Financially Responsible and Stable
Government Services
1 Third Party Administrative Services Agreement _ City of Springfield_0124
THIRD PARTY ADMINISTRATIVE SERVICES AGREEMENT
No. G0020720
In consideration of City of Springfield’s Acceptance and in consideration of payment of
Administrative Services Fees in the amounts and at the time required, PacificSource Health
Plans, an Oregon not-for-profit corporation, will provide administrative services for the City of
Springfield Employee Benefit Plan for each enrolled person in accordance with the provisions and
subject to the conditions of this Agreement.
This Agreement, including all attachments, addendums, exhibits, PacificSource Stop Loss
Policy (if applicable), or amendments affixed hereto, shall be the entire contract between the
Parties.
Payment of the monthly service charges will constitute acceptance of this Administrative Services
Agreement and the changes contained within.
PacificSource Health Plans
PO Box 7068, Springfield, OR 97475-0068
Attachment 1 Page 1 of 36
2 Third Party Administrative Services Agreement _ City of Springfield_0124
Table of Contents
I. RECITALS ........................................................................................................................................ 4
II. INTRODUCTION............................................................................................................................... 4
2.1 Effective Date and Term ........................................................................................................ 4
2.2 Scope of Relationship ............................................................................................................ 4
2.3 Definitions ................................................................................................................................ 5
III. RESPONSIBILITIES OF SPONSOR................................................................................................ 6
3.1 Role of Sponsor ...................................................................................................................... 6
3.2 Funding and Services Charges ............................................................................................ 6
3.3 Information to PacificSource ................................................................................................. 6
3.4 Plan Documents ..................................................................................................................... 7
3.5 Financial Responsibility for Claims ...................................................................................... 7
3.6 Medical Records ..................................................................................................................... 7
3.7 HIPAA Privacy and Security ................................................................................................. 7
IV. RESPONSIBILITIES OF PACIFICSOURCE .................................................................................... 8
4.1 Limited Scope of Responsibilities ........................................................................................ 8
4.2 Customer Service ................................................................................................................... 8
4.3 Benefit Process and Payment .............................................................................................. 8
4.4 Bonding and Insurance Coverage ....................................................................................... 9
4.5 Reporting ................................................................................................................................. 9
4.6 Claims Appeals ....................................................................................................................... 9
4.7 Recordkeeping ........................................................................................................................ 9
4.8 Standard of Care; Erroneous Payments ........................................................................... 10
4.9 Notices to Sponsor ............................................................................................................... 10
4.10 Non-Discretionary Duties; Additional Duties .................................................................... 10
4.11 Subcontractors ...................................................................................................................... 10
V. PAYMENTS FOR BENEFITS; SPONSOR’S FUNDING RESPONSIBILITY ................................ 10
5.1 Payment of Benefits ............................................................................................................. 10
5.2 Prompt Payment ................................................................................................................... 11
5.3 Funding of Benefits .............................................................................................................. 11
5.4 Claims Pre Fund ................................................................................................................... 11
5.5 Subrogation, Reimbursement, and Recovery .................................................................. 11
VI. PACIFICSOURCE COMPENSATION ............................................................................................ 12
Attachment 1 Page 2 of 36
3 Third Party Administrative Services Agreement _ City of Springfield_0124
6.1 Service Charges ................................................................................................................... 12
6.2 Billing of Charges ................................................................................................................. 12
6.3 Payment of Charges ............................................................................................................ 12
6.4 Compensation Disclosures ................................................................................................. 12
VII. INDEMNIFICATION AND HOLD HARMLESS .............................................................................. 12
7.1 Indemnification by Sponsor ................................................................................................. 12
7.2 Indemnification by PacificSource ....................................................................................... 13
7.3 Termination of this Agreement shall not relieve either Party of its indemnification obligations
13
VIII. TERMINATION ............................................................................................................................... 13
8.1 Automatic ............................................................................................................................... 13
8.2 Discretionary ......................................................................................................................... 13
8.3 Limited Continuation Following Termination .................................................................... 14
8.4 Survival of Certain Provisions ............................................................................................. 14
IX. GENERAL PROVISIONS ............................................................................................................... 14
9.1 Severability ............................................................................................................................ 14
9.2 Headings ................................................................................................................................ 14
9.3 Compliance and Non-Waiver .............................................................................................. 14
9.4 Amendment ........................................................................................................................... 14
9.5 Assignment ............................................................................................................................ 14
9.6 Audits ...................................................................................................................................... 15
9.7 Non-Disclosure of Proprietary Information ....................................................................... 15
9.8 Governing Law; Venue; Attorneys’ Fees .......................................................................... 15
9.9 Notices and Communications ............................................................................................. 16
9.10 Force Majeure ....................................................................................................................... 16
9.11 Participation with Health Improvement Entities ............................................................... 16
9.12 Sponsor Vendor(s) ............................................................................................................... 17
9.13 Complete Agreement ........................................................................................................... 17
9.14 Opt-Out of Quality Improvement Measures ...................................................................... 17
X. SIGNATURE ................................................................................................................................... 17
Attachment 1 Page 3 of 36
4 Third Party Administrative Services Agreement _ City of Springfield_0124
This Agreement is made by and between PacificSource Health Plans (“PacificSource”) as a
Third Party Administrator providing administrative services only, and City of Springfield, as Plan
Sponsor (“Sponsor”) of the City of Springfield Employee Benefit Plan (the “Plan”). PacificSource
and Sponsor shall be collectively referred to as the “Parties.”
I. RECITALS
1.1 Sponsor has established certain Programs for the benefit of its Employees, which
may be subject to the laws codified in ERISA, Health Care Reform, and in various other state
and federal statutory schemes.
1.2 PacificSource is in the business of assisting companies like Sponsor with the
administration of certain ministerial functions for benefit plans.
1.3 Sponsor has requested PacificSource assist it, and act on its behalf, with respect
to a variety of administrative and ministerial functions, including processing payment of certain
benefits, providing recordkeeping and other administrative services as described in this
Agreement.
1.4 PacificSource is a business associate under HIPAA with regards to the services it
will provide herein and, to that extent, has executed the Business Associate Addendum
attached hereto as Exhibit I.
NOW THEREFORE, in consideration of the mutual promises contained in this Agreement,
Sponsor and PacificSource agree as follows:
II. INTRODUCTION
2.1 Effective Date and Term
The Effective Date of this Agreement is the 1st day of January, 2024. The initial term of this
Agreement shall be a twelve (12) month period commencing on the Effective Date, unless
terminated earlier in accordance with the terms of this Agreement. After the initial term, this
Agreement may be renewed for successive one-year periods by the mutual, written agreement
of the Parties.
2.2 Scope of Relationship
Sponsor has the sole and final authority to establish, maintain, control, and manage the
operation of the Plan. PacificSource is and shall remain an independent contractor with respect
to the services being performed hereunder and shall not for any purpose be deemed a n
employee of Sponsor. Nor shall PacificSource and Sponsor be deemed partners, engaged in a
joint venture, or governed by any legal relationship other than that of independent contractor.
PacificSource does not assume any responsibility for the policy design of the Plan, the
adequacy of its funding, or any act or omission or breach of duty by Sponsor. Nor is
PacificSource in any way to be deemed an insurer, underwriter, or guarantor with respect to any
benefits payable under the Plan. With respect to paymen t of benefits, PacificSource generally
provides reimbursement services only and does not assume any financial risk or obligation with
respect to claims for benefits payable by Sponsor under the Plan. PacificSource does not intend
to be the “Named Fiduciary,” “plan sponsor,” or “Plan Administrator” (as such terms are
described in ERISA, other applicable law, or the Plan documentation) or assume any of the
administrative duties or responsibilities commensurate with those designations.
Attachment 1 Page 4 of 36
5 Third Party Administrative Services Agreement _ City of Springfield_0124
Unless required by applicable law, nothing in this Agreement shall be deemed to (1) render the
PacificSource a party to the Plan; (2) confer upon PacificSource any authority or control
respecting management of the Plan, authority or responsibility in connection with administration
of the Plan, or responsibility for the terms or validity of the Plan; or (3) impose upon
PacificSource any obligation to any Employee of Sponsor or any person who is participating in
the Plan (“Participant”) or otherwise entitled to benefits through the Plan.
2.3 Definitions
“Agreement” means this Third Party Administrative Services Agreement, including all
appendices, attachments, exhibits, and amendments affixed hereto.
“Business Associate Addendum” means the separate agreement entered into between
Sponsor and the PacificSource (as business associate) to document compliance with HIPAA's
privacy, security, and electronic data interchange (EDI) requirements.
“COBRA” means the Consolidated Omnibus Budget Reconciliation Act of 1985, as amended,
including regulations promulgated thereunder.
“ERISA” means the Employee Retirement Income Security Act of 1974, as amended, including
regulations thereunder.
“Effective Date” has the meaning given in Section 2.1.
“Electronic PHI” or “ePHI” is a type of PHI and has the meaning assigned to such term under
HIPAA.
“Employee” means any Participant employed or formerly employed by Sponsor. When a family
that does not include a current or former Employee is covered under the Plan, the oldest
Participant is considered the Employee for the purposes of this Agreement.
“Exhibits” means one or more documents added to this Agreement, and marked as exhibits,
which are incorporated by reference into and form part of this Agreement.
“Health Care Reform” means the Patient Protection and Affordable Care Act, (PPACA), as
amended by the Health Care and Education Reconciliation Act of 2010, (HCERA), and as
further amended from time to time, including regulations thereunder.
“HIPAA” means the Health Insurance Portability and Accountability Act of 1996, as amended,
including regulations thereunder.
“Named Fiduciary” means the named fiduciary as defined in ERISA §402(a)(1).
“Participant” has the meaning given in Section 2.2.
“Plan” means collectively and individually, each portion of the Program through which benefits
are provided, as identified in this Agreement.
“Plan Administrator” means the administrator as defined in ERISA §3(16)(A).
“Program” has the meaning given in the Recitals and refers to the Plans collectively.
Attachment 1 Page 5 of 36
6 Third Party Administrative Services Agreement _ City of Springfield_0124
“Protected Health Information” or “PHI” has the meaning assigned to such term under
HIPAA.
“Sponsor” means City of Springfield.
III. RESPONSIBILITIES OF SPONSOR
3.1 Role of Sponsor
(a) General. Sponsor has the sole authority and responsibility for the Plan and its
operation, including the authority and responsibility for establishing, administering, construing,
and interpreting the provisions of the Plan and making all determinations thereunder. Sponsor
gives PacificSource the authority to act on behalf of Sponsor in connection with the Plan, but
only as expressly stated in this Agreement or as mutually agreed in writing by Sponsor and
PacificSource. Sponsor is considered the Plan Administrator a nd Named Fiduciary of the Plan
benefits for purposes of ERISA.
(b) Responsibilities. Without limiting Sponsor's responsibilities described herein, it
shall be Sponsor's sole responsibility (as Plan Administrator) and duty to: ensure compliance
with ERISA, state law, federal law, COBRA, or any other regulation; perform required
nondiscrimination testing; amend the Plans as necessary to ensure ongoing compliance with
applicable law; file any required tax or governmental returns relating to the Plan(s); co llect and
forward any fees related to the Plans; determine if and when a valid election change has
occurred; administer Participant claim appeals as detailed herein; execute and retain required
Plan and claims documentation; and take all other steps necessary to maintain and operate the
Plans in compliance with applicable provisions of the Plans, ERISA, state law, federal law,
COBRA, or any other regulation. If Sponsor has elected to utilize PacificSource's subcontracted
pharmacy benefit manager and/or to h ave PacificSource process the Plan’s pharmacy benefits,
then Sponsor hereby agrees and confirms that it will not negotiate, contract, or work with a third
party regarding pharmacy rebates. To the extent that the Plan, as designed by Sponsor, does
not comply with any state or federal law or regulation or is judged lacking or deficient in some
way by a regulatory body or court, then Sponsor shall defend, indemnify and hold PacificSource
harmless as described in Section 7.1 below. Sponsor acknowledges that it is solely responsible
for all legal and regulatory obligations as it relates to the development, design and
administration of the Plan; provided, however, that PacificSource is responsible to meet its
obligations in this Agreement as to the Plan developed , designed and administered by Sponsor.
3.2 Funding and Services Charges
Sponsor shall pay PacificSource the service charges set forth in the Exhibits hereto, and as
further described in Sections 5.1 and 5.2. Sponsor shall promptly make any funds necessary
available for payment of benefits under the Plan. It is the Sponsor’s intent that the Plan be
operated to fall within an exception or non -enforcement policy with respect to ERISA’s trust
requirement for plan assets. To the extent PacificSou rce administers the remittance of fees or
expenses for which Sponsor is responsible, such as certain fees which may apply under Health
Care Reform, Sponsor shall promptly make those funds available to PacificSource for any
required remittance.
3.3 Information to PacificSource
Sponsor shall furnish the information requested by PacificSource as determined necessary to
perform PacificSource’s functions hereunder, including information concerning the Plan and the
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7 Third Party Administrative Services Agreement _ City of Springfield_0124
eligibility of individuals to participate in and receive Plan benefits. Such information shall be
provided to PacificSource in the time and in the manner agreed to by Sponsor and
PacificSource. PacificSource shall have no responsibility with regard to benefits paid (or not
paid) in error, or with regard to failure to timely provide required notices or other
communications, due to Sponsor's failure to timely update such information. From time to time
thereafter, at least as frequently as necessary to enable Sponsor and PacificSource to
discharge their respective responsibilities under applicable law, PacificSource shall provide
Sponsor with updated reports summarizing the eligibility data provided by Sponsor by electronic
medium (the “Reports”) unless otherwise agreed by the parties. The Reports shall specify the
effective date for each Participant who is added to or terminated from participation in the Plan.
Sponsor shall be responsible for ensuring the accuracy of its Reports, and bears the burden of
proof in any dispute with PacificSource relating to the accuracy of any Report. PacificSource
shall have no liability to Sponsor or any Participant as a consequence of an inaccurate Report,
and PacificSource shall not have any obligation to credit Sponsor for any claims expenses or
administrative fees incurred or paid to PacificSource as a consequence of Sponsor failing to
review Reports for accuracy. PacificSource shall assume that all such information is complete
and accurate, and is under no duty to question the completeness or accuracy of such
information. With respect to any Plan subject to the HIPAA privacy rule, such Reports shall be
considered PHI, and when transmitted by or maintained in electronic media shall be considered
ePHI, subject to the privacy and security rules under HIPAA an d the applicable separate
Business Associate Addendum.
3.4 Plan Documents
Sponsor is responsible for the Plan’s compliance with all applicable federal and state laws and
regulations, including amending Plan documents as necessary to comply with applicable law
changes and reflect changes to the benefit arrangements. Sponsor shall provide PacificSource
with all relevant documentation, including but not limited to, the Plan documents and any Plan
amendments. To the best of its ability, Sponsor will notify Pac ificSource of any changes to the
Plan at least 30 days before the effective date of such changes. Sponsor acknowledges that
PacificSource is not providing tax or legal advice and that Sponsor shall be solely responsible
for determining the legal and tax status of the Program.
3.5 Financial Responsibility for Claims
Sponsor is responsible for payment of claims made pursuant to, and the benefits to be provided
by, the Plan. PacificSource does not insure or underwrite the liability of Sponsor unde r the Plan.
Except for (a) expenses required for PacificSource to be in the business of providing services
under this Agreement; and (b) expenses specifically assumed by PacificSource in this
Agreement, Sponsor is solely responsible for all expenses incide nt to the Plan.
3.6 Medical Records
Sponsor shall, if required by law or regulation, (a) notify each Participant and provide each
Participant with an opportunity to opt out (if required); or (b) obtain from each Participant such
written authorization for release of any financial records and medical records which may be
required in accordance with any and all applicable state and federal laws (including HIPAA,
HiTECH, ARRA, and the Gram-Leach-Bailey Act) to permit Sponsor and/or PacificSource to
perform their respective obligations under the terms of this Agreement.
3.7 HIPAA Privacy and Security
With respect to any arrangement under the Plan that is subject to the HIPAA privacy rule,
Sponsor shall provide PacificSource with the applicable notice of privacy practices (prepared by
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8 Third Party Administrative Services Agreement _ City of Springfield_0124
the Plan; not prepared by PacificSource), as well as any subsequent changes to such notices.
Sponsor shall provide PacificSource with certification that the applicable Plan document has
been amended as required by the privacy rule to permit disclosures of PHI to Sponsor for plan
administration purposes and that Sponsor agrees to the conditions set forth in applicable Plan
documentation. Upon request, Sponsor will provide a copy of any applicable Plan amendments
to PacificSource. Other aspects of the HIPAA privacy rule are reflected in the separate
applicable Business Associate Addendum. Sponsor shall not request PacificSource to use or
disclose PHI in any manner that would not be permissible under the privacy rule if done by
Sponsor, except that PacificSource may use or disclose PHI for purposes of data aggregation
and the management and administrative activities of PacificSource, as provided in the separate
applicable Business Associate Addendum.
IV. RESPONSIBILITIES OF PACIFICSOURCE
4.1 Limited Scope of Responsibilities
PacificSource’s sole responsibilities shall be as described and enumerated in this Agreement,
and shall include any obligations listed in the Exhibits attached hereto. PacificSource generally
provides certain administrative and ministerial services for Sponsor, as more fully described in
this Agreement. PacificSource does not – under any circumstances – interpret the Plan or Plan
documents or provide legal advice.
4.2 Customer Service
PacificSource shall provide customer service personnel by telephone and e -mail during the
hours of 8:00 a.m. to 5:00 p.m. Pacific standard time and Mountain standard time, Monday
through Friday, excepting federally recognized holidays. PacificSource shall not be deemed in
default of this Agreement as a result of, nor held responsible for, any cessation, interruption or
delay in the performance of its obligations here under due to causes beyond its reasonable
control, including, but not limited to, natural disaster, act of God, labor controversy, civil
disturbance, disruption of the public markets, war or armed conflict, or the inability to obtain
sufficient materials or services required in the conduct of its business, including Internet access,
or any change in or the adoption of any law, judgment, or decree.
4.3 Benefit Process and Payment
PacificSource shall, on behalf of Sponsor, operate under the express terms of this Agreement
and the Plan. PacificSource shall accept and process claims of Participants received by
PacificSource for benefits under the Plan in accordance with the terms and conditions, including
timeframes, of the applicable Plan (as set forth in the Plan document) and applicable law.
PacificSource shall initially determine if persons covered by the Plan (as described in the
Reports) are entitled to benefits under the Plan, and shall adjudicate and pay Plan benefits to or
on behalf of Participants, as set forth in this Section IV and Section V, in accordance with Plan
terms and in its usual and customary manner. PacificSource shall not interpret any Plan
document or provision, but shall process claims in accordance with the Plan, written terms of the
Plan document(s). Where a claim is not paid in full, PacificSource shall provide written denial
notices in accordance with the terms and conditions, including timeframes, of the applicable
Plan (as set forth in the Plan document) and applicable law.
PacificSource shall have no duty or obligation with respect to claims incurred prior to the
Effective Date, if any, or Plan administration (or other) services arising prior to the Effective Date
(“Prior Administration”), if any, regardless of whether such services were/are to be performed
prior to or after the Effective Date. Sponsor agrees that: (a) PacificSource has no responsibility
Attachment 1 Page 8 of 36
9 Third Party Administrative Services Agreement _ City of Springfield_0124
or obligation with respect to claims incurred prior to the Effective Date and/or Prior
Administration; (b) Sponsor will be responsible for processing claims incurred prior to the
Effective Date (including any run-out claims submitted after the Effective Date) and maintaining
legally required records of all claims incurred prior to the Effective Date and Prior Administration
sufficient to comply with applicable legal (e.g., IRS substantiation) requirements; and (c)
Sponsor shall indemnify and hold PacificSource harmless for any liability relating to claims
incurred prior to the Effective Date and/or Prior Administration.
4.4 Bonding and Insurance Coverage
PacificSource has, and will maintain, an appropriate bond to act as a third party administrator
pursuant to this Agreement. This bond covers the handling of Sponsor’s and Participants'
money and must protect such money from losses by dishonesty, theft, forgery or alteration, and
unexplained disappearance. Such bond shall be in an amount sufficient to at least satisfy the
fidelity bonding requirement under ERISA §412 and any other applicable bonding
requirement(s). PacificSource shall also maintain business liability coverage in the amount of at
least $1 million. PacificSource shall provide proof of such bonding and business liability
coverage upon Sponsor’s request and shall notify Sponsor of any material changes, including
change of carrier, change in amount of coverage, or any other condition of coverage.
4.5 Reporting
PacificSource shall make available to Sponsor, representatives, and business associates as
identified and provided on the Authorized Recipient List (ARL). Sponsor will immediately notify
PacificSource of any changes to the ARL. PacificSource will provide reporting as outlined in the
Reporting Addendum.. Complex or ad-hoc reporting will be available as agreed upon subject to
any additional fees and size requirements as outlined in Exhibit II.
4.6 Claims Appeals
PacificSource will provide two levels of internal appeal review for Sponsor, and shall conduct
such reviews in accordance with its internal written procedures. PacificSource shall review any
appeals to ensure the subject matter of the appeal was handled appropriately and in
accordance with the plain, written language of the Plan Document(s). PacificSource shall accept
and forward any request for external review by a Participant to an appropriate Independent
Review Organization (“IRO”) as required. PacificSource shall coordinate the review of the
appeal by the IRO, and shall inform the Participant of the outcome of the same. PacificSource
shall handle any such requests in accordance with its internal policies and procedures. Any
fees associated with such a review shall be passed through to Sponsor.
4.7 Recordkeeping
PacificSource shall maintain, for the duration of this Agreement, the usual and customary books,
records and documents, including electronic records, that relate to the Program and its
Participants that PacificSource has prepared or that have otherwise com e within its possession.
These books, records, and documents, including electronic records, are the property of
Sponsor, and Sponsor has the right of continuing access to them during normal business hours
at PacificSource’s offices with reasonable prior no tice. If this Agreement terminates,
PacificSource shall deliver all such books, records, and documents to Sponsor, subject to
PacificSource’s right to retain copies of any records it deems appropriate. Sponsor shall be
required to pay PacificSource reasonable charges for transportation of such records.
Attachment 1 Page 9 of 36
10 Third Party Administrative Services Agreement _ City of Springfield_0124
Provided, however, that upon termination of this Agreement, PacificSource must comply with
the terms of the applicable separate Business Associate Addendum with respect to the
destruction or return of all PHI, including PHI that is in the possession of subcontractors or
agents of PacificSource.
4.8 Standard of Care; Erroneous Payments
PacificSource shall use reasonable care and due diligence in the exercise of its powers and the
performance of its duties under this Agreement, provided that a higher standard of care will be
exercised where required by applicable law. If PacificSource makes any payment under this
Agreement to an ineligible person, on a claim that is later determined to be fraudulent, or if more
than the correct amount is paid, PacificSource shall promptly notify Sponsor and make diligent
efforts to recover any payment made to or on behalf of an ineligible person, fraudulent claim, or
any overpayment. To the extent electronic payment cards are us ed, PacificSource shall follow
the Plan language and applicable legal requirements regarding the efforts to be made.
PacificSource will follow its established policies and procedures in pursuit of any such erroneous
payment, but will not be financially responsible for such erroneous payment even if it fails to
recover the amounts paid in error. PacificSource shall not be required to pursue any erroneous
payment that is for an amount of fifteen ($15) U.S. dollars or less.
4.9 Notices to Sponsor
PacificSource shall provide Sponsor with any and all notices, including those relating to privacy
policies and practices, as may be required by any applicable state and/or federal law addressed
to the representative designated in paragraph 9.9 (b).
4.10 Non-Discretionary Duties; Additional Duties
PacificSource and Sponsor agree that the duties to be performed by PacificSource under this
Agreement are non-discretionary. To the extent a question may arise regarding any Plan
document or provision thereof, PacificSource shall be entitled to rely on Sponsor’s direction or
interpretation. Any additional duties agreed upon by PacificSource and Sponsor will not be
effective unless specified in writing and signed by both Parties.
4.11 Subcontractors
PacificSource may engage subcontractors to assist PacificSource in the performance of its
obligations under this Agreement. Subcontractors may include, among others, vendors of debit
card services. PacificSource guarantees the subcontractor’s performance to the same degree
as if the PacificSource provided the services directly. PacificSource will ensure that, if
necessary, a Business Associate Addendum is in place with respect to applicable services
provided by a subcontractor. Notwithstanding anything to the contrary in this Agreement,
Sponsor hereby authorizes PacificSource to act as its agent, on a limited basis, to contract with
a subcontractor to act as a pharmacy rebate aggregator in an effort to enhance pharmacy
rebates, and to take such action as reasonably necessary to enhance such pharmacy rebates.
V. PAYMENTS FOR BENEFITS; SPONSOR’S FUNDING RESPONSIBILITY
5.1 Payment of Benefits
Sponsor authorizes PacificSource to pay Plan benefits from a bank account established by
PacificSource for the payment of Plan benefits. Pac ificSource issues payment weekly. The
Sponsor shall be invoiced for reimbursement twice per month or at such other interval as may
be agreed upon. Sponsor will reimburse PacificSource upon receipt but no later than five days
or as otherwise agreed upon. In the event Sponsor fails to remit reimbursement as required
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11 Third Party Administrative Services Agreement _ City of Springfield_0124
herein (“Reimbursement Default”), PacificSource shall have no duty or obligation to pay benefits
under this Agreement for the period of time in which Sponsor remains in Reimbursement
Default.
5.2 Prompt Payment
Payments for benefits under the terms of this Agreement may fall under the ‘Prompt Pay’
statute(s) of the State of Oregon. PacificSource shall comply with any and all such Prompt Pay
statute(s), including any interest payments that may be required under those statute(s), unless
Sponsor is exempt as an ERISA group, has received an exemption from such statute(s), or can
show that it is exempt under the explicit terms of the statute(s). Sponsor shall provide
PacificSource with any information reasonably requested by PacificSource detailing any claimed
exemption. In the absence of such evidence of exemption, PacificSource shall comply with any
Prompt Pay statute(s).
5.3 Funding of Benefits
Funding for any benefit payment to (or on behalf of) the Participants under the Plan, including
but not limited to, all benefits to Participants in accordance with the Plan, is the sole
responsibility of Sponsor. Sponsor agrees to accept liability for, and provide sufficient funds to
satisfy, all payments to Participants or on their behalf under the Plan, including claims for
reimbursement for covered expenses as described in the applicable Plan documents, if such
expenses are incurred and the claim is presented for payment during the term of this
Agreement.
5.4 Claims Pre Fund
Sponsor may be required to pay a claim pre fund upon the Effective Date of this Agreement.
This claim pre fund may be modified by written agreement of the Parties upon each renewal
date based on expected paid claim changes to the Plan and covered Participants. This claim
pre fund will be held in an interest bearing account by PacificSource until the termination date,
including the run out period if applicable, of this Agreement. The claim pre fund will be paid with
interest to the Sponsor 30 days following the end of the first 12 months of run-out administration.
5.5 Subrogation, Reimbursement, and Recovery
If a Participant incurs expenses for sickness or injury that occurred due to the negligence of a
third party and benefits are provided as described in the Plan, then: (1) PacificSource, on behalf
of the Sponsor, has the right to establish subrogation rights and to request reimbursement,
recovery, or subrogation for all benefits the Plan has paid that are related to any and all
damages collected from the third party for those same expenses whether by action at law,
settlement, or compromise, from the Participant, the Participant’s parents if the Participant is a
minor, or the Participant’s legal representative, in an amount as provided under the Plan
documents; and (2) PacificSource, on behalf of the Sponsor, has the right to request
reimbursement, recovery, or subrogation of the same from the third party or his or her insurer, in
an amount as provided under the Plan documents.
PacificSource is required to remit any collected reimbursement, recovery, or subrogation
amounts directly back to the Sponsor. This provision applies regardless of whether the third
party admits liability. Reimbursement, recovery, and subrogation activities shall be conducted in
accordance with applicable state and federal law, the terms of the Plan documents and in
accordance notification requirements as may be customary and required by applicable state and
federal laws.
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PacificSource has been authorized by the Sponsor to continue claims payments for any injury or
sickness that involves reimbursement, recovery, or subrogation, provided howeve r that
PacificSource shall additionally pursue any rights under this Section at the same time. If a
specific injury or sickness reaches an amount equal to the Sponsor’s stop loss deductible, then
PacificSource may temporarily place all claims payments in p ending status for such injury or
sickness while PacificSource pursues any rights under this Section.
VI. PACIFICSOURCE COMPENSATION
6.1 Service Charges
The monthly service charges of PacificSource are described in Exhibit II. Sponsor shall be
invoiced once per month. Sponsor will remit payment to PacificSource upon receipt but no later
than ten business days.
PacificSource may change the amount of such charges by providing at least 60 days written or
electronic notice to Sponsor. PacificSource may also change the monthly service charges as of
the date of any Plan change, upon a change of 10% or more in the number of Employees. In no
event will PacificSource allow any proration of service charges due as outlined in Exhibit II or
the PacificSource Stop Loss Policy (if applicable).
6.2 Billing of Charges
All service charges of PacificSource, whether provided for in this or any other Section of this
Agreement, shall be billed separately from statements for payment of claims so that a proper
accounting can be made by Sponsor as to the respective amounts paid for claims and for
administrative expenses.
6.3 Payment of Charges
All charges under this Section VI shall be determined by PacificSource and billed to Sponsor on
a monthly basis. Sponsor shall make payment to PacificSource within ten business days of
receipt of notice of the amount due.
6.4 Compensation Disclosures
PacificSource shall disclose direct and indirect sources of compensation received by
PacificSource, other than the items discussed above, attributable to this Agreement as required
by law. Total compensation received by PacificSource for the performance of services under
this Agreement, including direct and indirect sources of compensation, may not exceed what is
considered “reasonable” for purposes of ERISA’s prohibited transaction exemption for services
to a plan.
VII. INDEMNIFICATION AND HOLD HARMLESS
7.1 Indemnification by Sponsor
Subject to the limitations of the Oregon Governmental Tort Claims Act, ORS 30.260 et seq., the
Sponsor will indemnify, defend, save, and hold PacificSource (and its employees, officers,
directors, agents and affiliates) harmless from and against any and all claims, suits, actions,
liabilities, losses, penalties, or damages including court costs and reasonable attorney’s fees,
which result from or arise out of any responsibility, duty, or obligation of the Sponsor, the
Administrator, the Plan, or any other party with respect to the Plan, relating to the services to be
Attachment 1 Page 12 of 36
13 Third Party Administrative Services Agreement _ City of Springfield_0124
provided under this Agreement or any addenda to this Agreement, except to the extent such
claims, suits, actions, liabilities, losses, penalties, or damages arise out of the negligent acts or
omissions or misconduct of PacificSource or its employees, provided such acts or omissions
done by PacificSource were not done at the direction of the Sponsor or the Administrator when
established by clear and convincing evidence. In addition, Sponsor shall indemnify
PacificSource and hold it harmless from and against any liability, expense, demand, or other
obligation resulting from or arising out of any premium charge, tax, or similar assessment
(federal or state), for which the Plan or Sponsor is liable. For purposes of clarity, Sponsor’s
obligations in this Section 7.1 include any actions against PacificSource that arise from
Sponsor’s Plan design, direction or instructions to PacificSource, or program administration
where PacificSource administers Sponsor’s Program as designed, directed or instructed, or
planned by Sponsor. Sponsor shall also have the indemnification obligation described in Section
4.3.
7.2 Indemnification by PacificSource
PacificSource shall defend and indemnify Sponsor and hold it (and its Employees, officers,
directors, agents and affiliates) harmless from and against all loss, liability, damage, expense,
attorney's fees or other obligations resulting from, or arising out of, any act or omission of
PacificSource in connection with the Plan, or claim, demand, or lawsuit by Plan Participants and
beneficiaries against Sponsor in connection with benefit payments or services performed (or not
performed) by PacificSource hereunder. In addition, PacificSource shall indemnify Sponsor and
hold it harmless from and against any liability, expense, demand, or other obligation resulting
from or arising out of any premium charge, tax, or similar assessment (federal or state), for
which the PacificSource is liable.
7.3 Termination of this Agreement shall not relieve either Party of its indemnification
obligations
VIII. TERMINATION
8.1 Automatic
Unless specifically agreed to otherwise in a written amendment to this Agreement, this
Agreement shall terminate with 20 days written notice as of the earliest occurrence of any one of
the following: (1) the end of the term specified in Section 2.1, or any subsequent renewal
thereof; (2) the effective date of any legislation which makes the Plan and/or this Agreement
illegal; (3) the date either Party becomes insolvent, or bankrupt, or subject to liquidation,
receivership, or conservatorship; or (4) the termination date of the Plan, subject to any
agreement between Sponsor and PacificSource regarding payment of benefits after the Plan is
terminated.
8.2 Discretionary
This Agreement may be terminated with 20 days written notice as of the earliest occurrence of
any one of the following: (1) by PacificSource upon failure of the Sponsor to replenish the funds
of the account referenced in Section 5.1 within ten business days following notice of the same;
(2) by PacificSource upon the failure of Sponsor to pay any charges within ten business days
after they are due and payable as provided in Section VI; (3) by PacificSource upon the failure
of Sponsor to perform its obligations in accordance with this Agreement; (4) by Sponsor upon
the failure of PacificSource to perform its obligations in accordance with this Agreement or upon
termination of the Business Associate Addendum; (5) by Sponsor if it is unable to agree to any
adjustment of price in accordance with section 6.1, Exhibit II and the PacificSource Stop Loss
Attachment 1 Page 13 of 36
14 Third Party Administrative Services Agreement _ City of Springfield_0124
Policy (if applicable); or (6) by Sponsor upon a 30 business day written notice of termination to
PacificSource.
8.3 Limited Continuation Following Termination
If the Plan is terminated, Sponsor and PacificSource may mutually agree in writing as an
amendment to this Agreement that this Agreement shall continue for the purpose of payment of
any Plan benefit, expense, or claims incurred prior to the date of Plan te rmination. In addition, if
this Agreement is terminated while the Plan continues in effect, Sponsor and PacificSource may
mutually agree in writing as an amendment to this Agreement that this Agreement shall continue
for the purpose of payment of any claim s for which requests for reimbursements have been
received by PacificSource before the date of such termination. If this Agreement is continued in
accordance with this Section 8.3, Sponsor shall pay the required invoiced run -out claims and
any run-out claims processing fees, as set forth in Exhibit II, upon receipt but no later than ten
business days.
8.4 Survival of Certain Provisions
Termination of this Agreement shall not terminate: (1) the rights or obligations of either Party
arising out of a period prior to such termination; (2) the indemnity, confidentiality, privacy, and
security provisions of this Agreement; (3) the duties and obligations imposed on PacificSource
by the Business Associate Addendum attached hereto as Exhibit I to the extent they survive this
Agreement; and (4) any provision in this Agreement or any Addendum which specifically
provides for termination of this Agreement.
IX. GENERAL PROVISIONS
9.1 Severability
If any term of this Agreement is declared invalid by a court, the same will not affect the validity of
any other provision, provided that the basic purposes of this Agreement are achieved through
the remaining valid provisions.
9.2 Headings
The headings of Sections and subsections contained in this Agreement are for reference
purposes only and shall not affect in any way the meaning or interpretation of this Agreement.
9.3 Compliance and Non-Waiver
Failure by Sponsor or PacificSource to insist upon strict performance of any provision of this
Agreement will not modify such provision, render it unenforceable, or waive any subsequent
breach. No waiver or modification of any of the terms or provisions of this Agreement shall be
valid unless in each instance the waiver or modification is made pursuant to the amendment
provisions of Section 9.4, infra.
9.4 Amendment
This Agreement may only be amended by written agreement of the Parties.
9.5 Assignment
Neither Party can assign this Agreement without the other Party’s written consent, which shall
not be unreasonably withheld.
Attachment 1 Page 14 of 36
15 Third Party Administrative Services Agreement _ City of Springfield_0124
9.6 Audits
Each Party shall be authorized to perform audits of the records of payment to all Participants
and other data specifically related to performance of the Parties under this Agreement upon
reasonable prior written notice to the other. Audits shall be performed during normal working
hours. Audits may be performed by an agent of either Party, provided such agent signs an
acceptable confidentiality agreement, and Business Associate Addendum, as applicable. Each
Party agrees to provide reasonable assistance and information to the auditors. Sponsor
acknowledges and agrees that if it requests an audit, it shall reimburse PacificSource for
PacificSource’s reasonable expenses, including copying and labor costs, in assisting Sponsor to
perform the audit.
9.7 Non-Disclosure of Proprietary Information
(a) General. Sponsor and PacificSource each acknowledge that in contemplation
of entering into this Agreement (and as a result of the contractual relationship created hereby),
each Party has revealed and disclosed, and shall continue to reveal and disclose to the other,
information which is proprietary and/or confidential information of such Party. Sponsor and
PacificSource agree that each Party shall: (1) keep such proprietary and/or confidential
information of the other Party in strict confidence; (2) not disclose confidential information of the
other Party to any third parties or to any of its employees not having a legitimate need to know
such information; and (3) shall not use confidential information of the other Party for any
purpose not directly related to and necessary for the performance of its obligations under this
Agreement (unless required to do so by a court of com petent jurisdiction or a regulatory body
having authority to require such disclosure).
(b) Confidential Information Defined. Information revealed or disclosed by a Party
for any purpose not directly related to and necessary for the performance of such Party's
obligations under this Agreement shall not be considered confidential information for purposes
hereof: (1) if, when, and to the extent such information is or becomes generally available to the
public without the fault or negligence of the Party rec eiving or disclosing the information; (2) if
the unrestricted use of such information by the Party receiving or disclosing the information has
been expressly authorized in writing and in advance by an authorized representative of the other
Party; or (3) if required by applicable law. For purposes of this Section, confidential information
is any information in written, human-readable, machine-readable, or electronically recorded form
(and marked as confidential and/or proprietary, or words of similar import) and information
disclosed orally in connection with this Agreement and identified as confidential and/or
proprietary (or words of similar import); and programs, policies, practices, procedures, files,
records, and correspondence concerning the Parties' respective businesses or finances. The
terms and conditions of this Section 9.7(b) shall survive the termination of this Agreement.
9.8 Governing Law; Venue; Attorneys’ Fees
This Agreement is made and entered into and is to be governed by the laws of the State of
Oregon applicable to agreements made within such State, without regard to the conflicts of law
principles of such State. The venue for all purposes in connection with this Agreement shall be
the County of Lane, State of Oregon. In the event any suit or action is instituted under or in
relation to this Agreement, including without limitation to enforce any provision of this
Agreement, the prevailing party in such dispute shall be entitled to recover from the non -
prevailing party all fees, costs, and expenses of enforcing any right of such prevailing party
under this Agreement, including without limitation, such reasonable fees and expenses of
attorneys which shall include, without limitation, all fees, costs, and expenses of appeals.
Attachment 1 Page 15 of 36
16 Third Party Administrative Services Agreement _ City of Springfield_0124
9.9 Notices and Communications
(a) Notices. All notices provided for herein shall be sent by confirmed facsimile, or
guaranteed overnight mail, with tracing capability, or by first class United States mail, with
postage prepaid, addressed to the other Party at their respective addresses set forth below or
such other addresses as either party may designate in writing to the other from time to time for
such purposes. All notices provided for herein shall be deemed given or made when received.
(b) Addresses.
Sponsor’s address for notices is: PacificSource’s address for notices is:
City of Springfield PacificSource Health Plans
Attn: Chaim Hertz Attn: Sales
225 5th St PO Box 7068
Springfield, OR 97477 Springfield, OR 97475-0068
(c) Communications. Sponsor agrees that PacificSource may communicate
confidential, protected, privileged or otherwise sensitive information to Sponsor through the
named contact noted above (“Named Contact”) designated by Sponsor and specifically agrees
to indemnify PacificSource and hold it harmless: (1) for any such communications directed to
Sponsor through the Named Contact attempted via telefax, mail, telephone, email, or any other
media, acknowledging the possibility that such communications may be inadvertently misrouted
or intercepted; and (2) from any claim for the improper use or disclosure of any PHI by
PacificSource if such information is used or disclosed in a manner consistent with its duties and
responsibilities hereunder or under the separate applicable Business Associate Addendum.
9.10 Force Majeure
All obligations of both Parties shall be suspended while, but only as long as, a Party is
prevented by matters beyond its reasonable control from complying with such obligat ions in
whole or in part as by strikes, lockouts, acts of God, explosion, flood, epidemics, unavoidable
accidents, inability to obtain permits, licenses, or any necessary governmental or private
authorization, any local, state or federal law, regulation or order or any other matters beyond the
reasonable control of a Party, whether similar to the matters herein specifically enumerated or
not and whether foreseeable or unforeseeable; provided, however, that the Party shall have,
and continue to, in a timely and diligent manner to remedy such cause; and provided, however,
that performance shall be resumed within a reasonable time after such cause has been
removed; and provided further that neither Party shall be required, unwillingly, to adjust any
labor disputes or to question the validity or to refrain from judicially testing the validity of any
local, state or federal order, regulation or law.
9.11 Participation with Health Improvement Entities
PacificSource is a participating member with various entities that are devoted to improving
public health. From time to time, PacificSource may release any data in its possession to these
entities, or to any third party vendor employed by such an entity. PacificSource shall take all
reasonable steps to ensure that any such data is protected by data use and/or business
associate agreements, as may be appropriate. Execution of this Agreement by Sponsor shall
serve as specific authorization for the release of such data in accordance with this provision.
Attachment 1 Page 16 of 36
17 Third Party Administrative Services Agreement _ City of Springfield_0124
9.12 Sponsor Vendor(s)
If the Sponsor elects to utilize a third party vendor(s) for any part of its health Plan, including
without limitation an enrollment vendor, pharmacy benefit manager, or care management
vendor, then the Sponsor hereby affirms that it has entered into a valid business associate
agreement with said vendor(s) and that both the Sponsor and vendor(s) are in compliance with
HIPAA, as amended. The Sponsor hereby requests and authorizes PacificSource to exchange
Protected Health Information with said vendor(s) for the purpose of administering the eligibility,
benefits, and services provided in this Plan.
9.13 Complete Agreement
This Agreement, which includes the following, constitute the full Agreement of the Parties with
respect to the subject matter hereof and supersedes all prior and contemporaneous agreements
and representations between the Parties. Included and incorporated are:
• Exhibit I: Business Associate Addendum;
• Exhibit II: Coverage Services Addendum;
• Confidentiality Agreement with CVS/Caremark;
• PacificSource Stop Loss Policy if applicable; and
• Any applicable appendices, attachments, exhibits, and amendments affixed hereto.
9.14 Opt-Out of Quality Improvement Measures
Sponsor will not be included in any quality improvement measures conducted by PacificSource,
including without limitation Health Effectiveness and Data Information Set, Consumer
Assessment of Healthcare Providers and Systems, and all National Committee for Quality
Assurance accreditation activities. As such, PacificSource will have no contact with Participants
for any purpose under this section.
X. SIGNATURE
IN WITNESS WHEREOF, Sponsor and PacificSource have caused this Agreement to be
executed in their names by their undersigned officers, who are duly authorized to do so.
“Sponsor” “PacificSource”
City of Springfield PacificSource Health Plans
By:________________________ By:
Print:______________________ Print: John Espinola, MD
Title:______________________ Title: President and Chief Executive Officer
Date:______________________ Date: 12/18/2024
Attachment 1 Page 17 of 36
1 Exhibit I: Business Associate Addendum_City of Springfield_0124
EXHIBIT I: BUSINESS ASSOCIATE ADDENDUM
Between
City of Springfield
and
PacificSource Health Plans
Sponsor and PacificSource intend to protect the privacy and provide for the security of
PHI disclosed to PacificSource pursuant to the Agreement in compliance with the Health
Insurance Portability and Accountability Act of 1996, as amended (“HIPAA”), and
regulations promulgated thereunder (the “HIPAA Regulations”), the American Recovery
and Reinvestment Act of 2009, and regulations promulgated thereunder, and other
applicable laws, as further described below.
1. Definitions. Capitalized terms used herein without definition shall have the meanings
assigned to such terms in 45 CFR Parts 160 and 164.
2. Obligations of PacificSource
(a) Permitted Uses and Disclosures. PacificSource may use and/or disclose PHI only
as required to satisfy its obligations under the Agreement, as permitted herein, or
required by law, but shall not otherwise use or disclose PHI.
(b) Safeguards. PacificSource shall use commercially reasonable safeguards to
prevent use or disclosure of Plan Sponsor PHI other than as provided for by this
Addendum, including encryption of electronic PHI outside of a secured data center.
PacificSource shall maintain a comprehensive written information privacy and
security program that includes administrative, technical and physical safeguards
that reasonably and appropriately protect the confidentiality, integrity and
availability of electronic PHI that it creates, receives, maintains, or transmits on
behalf of Plan Sponsor, as required by 45 CFR 164.314(a)(2)(i)(A).
(c) Reporting of Disclosures. PacificSource shall report to Plan Sponsor any use or
disclosure of Plan Sponsor PHI otherwise than as provided for by this Addendum
of which PacificSource becomes aware. PacificSource shall also report to Plan
Sponsor any Security Incident related to PHI of which PacificSource becomes
aware.
Attachment 1 Page 18 of 36
2 Exhibit I: Business Associate Addendum_City of Springfield_0124
(d) Mitigation. PacificSource agrees to mitigate, to the extent practicable, any harmful
effect that is known to PacificSource of a use or disclosure of PHI by PacificSource
in violation of this Addendum.
(e) PacificSource’s Agents. PacificSource shall ensure that any agents, including
subcontractors, to whom it provides PHI received from (or created or received by
PacificSource on behalf of) Plan Sponsor, agree to the same restrictions and
conditions that apply to PacificSource with respect to such PHI.
(f) Availability of Information to Plan Sponsor. PacificSource shall make available to
Plan Sponsor such information as Plan Sponsor may require to fulfill the
obligations of Plan Sponsor to provide access to, provide a copy of, and account
for disclosures with respect to PHI pursuant to HIPAA and the HIPAA Regulations,
including, but not limited to, 45 CFR Section 164.524 and 164.528.
(g) Amendment of PHI. PacificSource shall make Plan Sponsor PHI available to Plan
Sponsor as Plan Sponsor may require to fulfill Plan Sponsor obligations to amend
PHI pursuant to HIPAA and the HIPAA Regulations, including, but not limited to,
45 CFR Section 164.526 and PacificSource shall, as directed by Plan Sponsor,
incorporate any amendments to Plan Sponsor PHI into copies of such PHI
maintained by PacificSource.
(h) Internal Practices. PacificSource shall make its internal practices, books, and
records relating to the use and disclosure of PHI received from (or created or
received by PacificSource on behalf of) Plan Sponsor available to the Secretary
for purposes of determining the compliance of Plan Sponsor with HIPAA and the
HIPAA Regulations.
(i) Documentation and Accounting of Disclosures. PacificSource shall document
disclosures of PHI, and provide such information, as would be required for Plan
Sponsor to respond to a request by an Individual for an accounting of disclosures
of PHI in accordance with 45 CFR Section 164.528.
(j) Notification of Breach. During the term of this Addendum, PacificSource shall
notify Plan Sponsor as soon as reasonably practical of any suspected act or actual
breach of security, intrusion or unauthorized use or disclosure of PHI and/or any
actual or suspected use or disclosure of data in violation of any applicable federal
or state laws or regulations, and shall provide such information as required under
HIPAA. PacificSource shall take (i) prompt corrective action to cure any such
deficiencies and (ii) any action pertaining to such unauthorized disclosure required
by applicable federal and state laws and regulations.
3. Obligations of Plan Sponsor.
(a) Safeguards. Plan Sponsor shall be responsible for using appropriate safeguards
to maintain and ensure the confidentiality, privacy and security of PHI transmitted
to PacificSource pursuant to this Addendum, and in accordance with the standards
and requirements of HIPAA and the HIPAA Regulations until such PHI is received
by PacificSource; at a minimum, Plan Sponsor shall ensure that all electronic PHI
Attachment 1 Page 19 of 36
3 Exhibit I: Business Associate Addendum_City of Springfield_0124
is encrypted. Plan Sponsor shall be responsible to send any and all notifications
required under HIPAA.
(b) Notification of Limitations. Plan Sponsor shall notify PacificSource of any
limitations in its notice of privacy practices of Plan Sponsor in accordance with 45
CFR Section 164.520, to the extent that such limitations may affect PacificSource’s
use or disclosure of PHI.
(c) Notice of Changes. Plan Sponsor shall notify PacificSource of any changes in, or
revocation of, permission by Individual to use or disclose PHI, to the extent that
such changes may affect PacificSource’s use or disclosure of PHI.
(d) Notification of Restrictions. Plan Sponsor shall notify PacificSource of any
restriction to the use or disclosure of PHI that Plan Sponsor has agreed to in
accordance with 45 CFR Section 164.522, after consultation with PacificSource,
to the extent such restriction may affect PacificSource’s use or disclosure of PHI.
(e) Compliance. Plan Sponsor shall not act or fail to act in a manner that would cause
PacificSource to violate or not be in compliance with this Addendum, applicable
state and federal laws, including HIPAA. Employer acknowledges that it is not
PacificSource’s responsibility or obligation to ensure that Plan Sponsor comply
with any applicable state and/or federal laws.
4. Audits, Inspections and Enforcement. From time to time upon reasonable notice,
upon reasonable determination by Plan Sponsor that PacificSource has breached this
Addendum; Plan Sponsor may inspect the facilities, systems, books and records of
PacificSource that pertain to the Plan Sponsor to monitor compliance with this
addendum. PacificSource shall promptly remedy any violation of any term of this
addendum and shall certify the same to Plan Sponsor in writing.
5. Termination.
(a) Reasonable Steps to Cure Breach. If Plan Sponsor knows of a pattern of activity
or practice of PacificSource that constitutes a material breach or violation of the
PacificSource’s obligations under the provision of this Addendum or another
arrangement and does not terminate the Agreement pursuant to the termination
provisions of the Agreement, then PacificSource shall take reasonable steps to
cure such breach or end such violation as applicable. If PacificSource’s efforts to
cure such breach or end such violation are unsuccessful, Plan Sponsor shall either
(i) terminate the Agreement, if feasible, or (ii) if termination of this Addendum is not
feasible, Plan Sponsor shall report PacificSource’s breach or violation to the
Secretary.
(b) Judicial or Administrative Proceedings. Either party may terminate the Agreement
effective immediately, if (i) the other party is named as a defendant in a criminal
proceeding for a violation of HIPAA or (ii) a finding or stipulation that the other party
has violated any standard or requirement of HIPAA or other security or privacy
laws is made in any administrative or civil proceeding in which the party has been
joined.
Attachment 1 Page 20 of 36
4 Exhibit I: Business Associate Addendum_City of Springfield_0124
(c) Effect of Termination. Upon termination of this Addendum for any reason,
PacificSource shall return or destroy all PHI received from (or created or received
by PacificSource on behalf of) Plan Sponsor that PacificSource still maintains in
any form and shall retain no copies of such PHI or, if the return or destruction is
not feasible, it shall continue to extend the protections of this Addendum to such
information.
6. Amendment to Comply With Law. The parties acknowledge that state and federal
laws relating to Electronic Data Security and privacy may be evolving and that the
amendment of this Addendum may be required to provide for procedures to ensure
compliance with such developments. The parties specifically agree to take such
action as is necessary to implement the standards and requirements of HIPAA, the
HIPAA Regulations, and other applicable laws relating to the security and
confidentiality of PHI.
7. No Third Party Beneficiaries. Nothing expressed or implied in this Addendum is
intended to confer, nor shall anything herein confer, upon any person other than Plan
Sponsor, PacificSource and their respective successors or assigns, any rights,
remedies, obligations or liabilities whatsoever.
8. Effect on Agreement. Except as specifically required to implement the purposes of
this Addendum, or to the extent inconsistent with this Addendum, all other terms of
the Agreement shall remain in force and effect.
9. Interpretation. This Addendum and the Agreement shall be interpreted as broadly as
necessary to implement and comply with HIPAA, HIPAA Regulations, and applicable
state laws. The parties agree that any ambiguity in this Addendum shall be resolved
in favor of a meaning that complies and is consistent with HIPAA and the HIPAA
Regulations.
Attachment 1 Page 21 of 36
1 Exhibit II: Coverage Services Addendum_City of Springfield_0124
EXHIBIT II: COVERAGE SERVICES ADDENDUM
Between
City of Springfield
and
PacificSource Health Plans
Agreement Period: 01/01/2024 through 12/31/2024
I. INTRODUCTION
This Exhibit II: Coverage Services is effective as of the date noted in Section 2.1 of the Third
Party Administrative Services Agreement entered into by and between City of Springfield
(“Sponsor”) and PacificSource Health Plans (“PacificSource”), and to which this Exhibit is
attached. In the event of any discrepancy or contradiction between the terms of the Agreement
and this Exhibit, the terms of this Exhibit shall control.
II. FEES
The fees and costs payable for the services provided under this Exhibit II shall be as follows:
Number of Employees on Effective Date 420
Required Claim Fund Deposit Received in 2013 $200,000
Administrative Fees
Broker Fees
Network Fees
Claims Administration PEPM
Medical / RX $48.35
Vision Included in Medical/RX Fee
Coverage PEPM
Medical/RX $0
Network Fee
Medical Access Fee $4.75 PEPM
Travel Wrap Network Fee
First Choice of Washington 12.75% of Savings
Aetna Signature Administrators 16.75% of Savings
Attachment 1 Page 22 of 36
2 Exhibit II: Coverage Services Addendum_City of Springfield_0124
Travel Wrap programs are available for coverage when members travel outside of your
chosen network(s). Travel Wrap Network Fees are per PacificSource agreement with
the Travel Wrap Network, and are subject to change. The Fees noted above are pass
through costs.
Aetna Signature Administrators percent of savings fee applies to all services received
outside of PacificSource’s four state service area and billed in addition to medical
network access fee as a pass through cost in the Register of Paid Claims.
Optional Programs
Other
III. PHARMACY
IV. INCLUDED SERVICES FOR COVERAGES ADMINISTERED BY PACIFICSOURCE
Programs Accept
/Decline
ACS Quit for Life – Tobacco Cessation $ PEPM Declined
Assist America – Global Emergency Services $0.41 PEPM Accepted
Biometric Screening Pass through Declined
Health Education Programs Pass through Accepted
Medicare Part B Premium Reimbursement -
(dialysis program) Pass through Accepted
Teladoc $ PEPM Declined
Weight Watchers Pass through Accepted
Coordination of Benefits - True 1/1/24– 7/31/24 8/1/24–
12/31/24
Assessment
Basis
Comprehensive COB –
One time fee per identified member $35.00 $36.05 Per Validation
Fee
Renewal Notification - Days
Advanced Renewal Notification 120 days
Pharmacy Benefit Manager (PBM) - Caremark
Pharmacy Rebates 100% of rebates shared with Sponsor
Services
24 Hour Nurseline
Condition Support and AccordantCare – Rare Disease Management
Prenatal Management
Standard Documents:
Attachment 1 Page 23 of 36
3 Exhibit II: Coverage Services Addendum_City of Springfield_0124
V. STANDARD ADDITIONAL FEES
*Custom Programming available to groups with 500 or more enrolled Employees. This
is defined as programming beyond implementation that 1) is specific to Customer’s
operations or benefits; or 2) results in the need for system enhancements.
VI. PACIFICSOURCE CONTACT INFORMATION
Any correspondence mailed to
PacificSource will be mailed to:
PacificSource Health Plans
Attn: Sales
PO Box 7068
Springfield, OR 97475-0068
Phone: 541-686-1242
Fax: 541-485-0915
Any Enrollment Information, billing
information, and payments mailed
to PacificSource will be mailed to:
PacificSource Health Plans
Attn: Membership Services
PO Box 7068
Springfield, OR 97475-0068
Phone: 866-999-5583
Fax: 541-225-3642
E-mail: Membership@PacificSource.com
Plan Documents
Plan Amendments
Summary of Benefits and Coverage (SBC)
Standard Identification Cards
Utilization Review & Large Case Management
Wellness Programs Level I
Other Fee
Applicable taxes, surcharges and assessments Pass through cost to Sponsor
Claim audits, vendor set-up and similar charges Pass through cost to Sponsor
Custom Ad Hoc Reporting $175 per hour
Custom Programming* $150 per hour
Independent Medical Review (IMR) Pass through cost to Sponsor
Federal No Surprises Act Independent Dispute
Resolution Fees Pass through cost to Sponsor
Independent Review Organization (IRO) Pass through cost to Sponsor
Run-In Claims Processing Not Available
Run-Out Claims Processing
Two months claims administration
fees for 12 months of run-out
services
SBC & SPD Printing and Shipping Pass through cost to Sponsor
State Surprise Billing Program/Arbitration Fees Pass through cost to Sponsor
Attachment 1 Page 24 of 36
1 Reporting Services Addendum_Medical_0124
REPORTING SERVICES ADDENDUM
This addendum outlines reporting services performed by PacificSource on behalf of the
Sponsor. Reporting services are limited to coverages administered by PacificSource and where
applicable by federal and state regulations. Please refer to Exhibit II for any applicable Standard
Additional Fees.
The following list is not exhaustive and is subject to change.
- Air Ambulance Claims Report
- Annual Gag Clause Attestation (when authorized by Sponsor)
- Annual Prescription Drug Data Collection (RxDC) Reporting
- Idaho Immunization Assessment (program eligible participants)
- Machine Readable Files (In-network (INN) Rate, Out-of-network (OON) Allowed Amount,
Prescription Drugs)
- Non-Quantitative Treatment Limitations (NQTL) Comparative Analysis
- Pricing Information for 500 items and services available on-line
- Qualifying Payment Amount (QPA) Independent Dispute Resolution
- Section 6055 and 6056 reporting requirements (Forms 1094/1095)
- Standard Client Reporting
- State Surcharge Reporting
- Washington State Partnership Access Line (WAPAL) Fund
Attachment 1 Page 25 of 36
PSGSL.OR.0115 Page 1 City of Springfield_0124
STOP LOSS POLICY
Between
City of Springfield
and
PacificSource Health Plans
WITNESSETH:
In consideration of the Policyholder’s payment of monthly premium in the amounts and at the time
required, PacificSource will provide stop loss insurance for each Covered Participant in accordance
with the provisions and subject to the conditions of this Stop Loss Policy.
This Stop Loss Policy, including all certificates of coverage, application, endorsements, schedules,
or amendments affixed hereto, shall be the entire policy of stop loss insurance fully as if recited over
the signature affixed hereto.
IN WITNESS WHEREOF, PacificSource has caused this Self-Funded Group Health Plan Policy
(the “Plan”) to be executed as of 12:00:01 a.m. this 1st day of January, 2024.
PacificSource Health Plans
Johns Espinola, MD
President Chief Executive Officer
POLICYHOLDER’S ACCEPTANCE
Payment of premium will constitute acceptance of this policy and the changes contained
within.
PacificSource Health Plans
PO Box 7068, Springfield OR 97475-0068
Attachment 1 Page 26 of 36
PSGSL.OR.0115 Page 2 City of Springfield_0124
TABLE OF CONTENTS
I. INTRODUCTION………………………………………………………………………….. 3
II. DEFINITIONS……………………………………………………………………………… 3
III. FEE SCHEDULE ……………………………………………………………………….… 5
IV. STOP LOSS PROVISIONS ……………………………………………………………... 6
V. GENERAL EXCLUSIONS AND LIMITATIONS ………………………………………. 8
VI. TERMINATION……………………………………………………………………………. 10
VII. CONTACT INFORMATION ……………………………………………………………...10
Attachment 1 Page 27 of 36
PSGSL.OR.0115 Page 3 City of Springfield_0124
STOP LOSS POLICY
I. INTRODUCTION
This Stop Loss Policy is entered into by and between the City of Springfield (the “Plan Sponsor”) and
PacificSource Health Plans (“PacificSource).
WHEREAS, Plan Sponsor has established the City of Springfield Employee Benefit Plan, a self-
funded group health plan (“SFGHP”) for its Covered Participants (as defined below);
WHEREAS, Plan Sponsor has retained Claim Administrator to provide claim processing and other
administrative services for the SFGHP during the Term (defined below) as set forth in an agreement
entitled “Administrative Services Agreement” (“ASA”);
WHEREAS, Plan Sponsor assumes liability for and funds all benefits under the SFGHP, except as
otherwise provided in this Stop Loss Policy;
THEREFORE, in consideration of the mutual agreements and covenants contained herein and other
good and valuable consideration, the Parties agree as set forth herein.
Policy Period: 01/01/2024 through 12/31/2024
II. DEFINITIONS
Aggregate Attachment Point means the sum of the Monthly Aggregate Claims Factors that is
multiplied by the number of monthly Covered Participants each month during the Policy Period.
Aggregate Reimbursement Maximum means the limit of PacificSource liability in excess of the
Aggregate Stop Loss Attachment Point per Policy Period under the Stop Loss Provision of this
Policy. The Aggregate Stop Loss Limit of Liability is shown in Stop loss Fee Schedule. Expenses
that are the responsibility of the Covered Participant, such as deductibles and coinsurance, do not
count toward this maximum. Covered services in excess of the Aggregate Reimbursement
Maximums are the responsibility of the Plan Sponsor.
Aggregating Specific means an additional deductible applied to the Individual Specific Deductible.
Claims in excess of the Specific Deducible, during the term of the contract, will be added until the
cumulative total exceeds the Aggregating Specific amount. The Aggregating Specific must be
satisfied prior to reimbursements on any Individual Specific Deductible.
Aggregate Stop Loss means the stop loss provided by PacificSource under the Stop Loss
Provision of this Policy. Additionally, it is a form of stop loss coverage that provides protection for the
employer against the accumulation of total claims for the group as a whole exceeding a stated level.
Aggregate Stop Loss Attachment Point is the total amount of Paid Claims for which the Plan
Sponsor shall be liable while this Policy and the Third Party Administrative Services Agreement
remain in effect. The Aggregate Stop Loss Attachment Point must be met in each Policy Period
and will be determined at the end of each Policy Period.
Claim Administrator means PacificSource Health Plans. The term “Claim Administrator” as used
in this Policy does not refer to the Plan Administrator used in the Employee Retirement Income
Security Act (ERISA) of 1974.
Attachment 1 Page 28 of 36
PSGSL.OR.0115 Page 4 City of Springfield_0124
Covered Expenses means the eligible charges payable under the terms of the Plan. Covered
Expenses do not include the following:
1. Amounts in excess of Plan benefits, or services not covered by the Plan; or
2. Amounts or Services specifically excluded or limited by this Policy, the Stop Loss and
Aggregate Monthly Premiums, any endorsements, or any amendments to the Plan.
Covered Participant means an eligible individual and that individual’s dependents that become
covered for benefits under the terms of the Plan.
Disclosure Statement means the signed statement outlying any and all potential Large Claims
from the Plan Sponsor. This is provided to and accepted by PacificSource that proves certain
Underwriting information regarding Covered Participants which include disabled persons.
Domestic Expenses means any hospital Inpatient, hospital outpatient, clinic or staff physician
charges Incurred in a facility that is a parent, subsidiary or affiliate of the Plan Sponsor. Domestic
reimbursement percentages are applied to existing contracted rates.
Domestic Partnership means individuals of any gender ages 18 or older who are joined in a
domestic partnership and share jointly the same permanent residence; have an exclusive domestic
partnership; and are not in a legally binding marriage.
Expected Claim means an estimate of the dollar value of claims to be paid during a policy period.
Incurred means the date on which services for Covered Expenses were rendered for a Covered
Participant according to the terms of the Plan Sponsor’s Plan.
Incurred and Paid period means the period of time specified in the Schedule benefit plan in which a
Covered Expense must be Incurred by a Covered Participant and paid by the Plan to be eligible
for reimbursement under this Policy. This period does not alter the Effective Date, Policy Period, or
waive this Policy's eligibility requirements.
Individual Specific Stop Loss Deductible means the amount shown on the Stop Loss Fee
Schedule for which the Plan Sponsor is responsible to pay. The Individual Specific Stop Loss
Deductible applies separately to each Covered Participant for each Policy Period.
Large Claim means paid or pending Covered Expenses greater than or equal to 50% of the
Individual Specific Stop Loss Deductible.
Lasering means a situation where a higher Individual Specific Stop Loss Deductible is assigned
to a Covered Participant (“Lasered Deductible”). Lasered Participants will be identified in the Stop
loss Fee Schedule.
Minimum Aggregate Margin Attachment Point means the minimum claims level (deductible) at
which the Aggregate Stop Loss insurance policy applies. This level is determined by multiplying the
enrollment in the first month of the policy times 12 months the Aggregate Claim Factors.
Paid Claims means that:
1. The Covered Expense is adjudicated according to the terms of the Plan;
2. A check is written and mailed or electronically deposited directly to the payee within the
Policy Period; and
3. Funds are available to honor the check. To be sure those funds are available; they must
be on deposit no later than the first working day following the end of the Policy Period.
Attachment 1 Page 29 of 36
PSGSL.OR.0115 Page 5 City of Springfield_0124
Reimbursement Percentage means the rate at which PacificSource will reimburse the Plan
Sponsor.
Specific Stop Loss shall mean the stop loss provided by PacificSource under the Fees section of
this Policy.
Specific Stop Loss Attachment Point is the total amount of Paid Claims per covered individual
that is not subject to reimbursement or credit by PacificSource under the Specific Stop Loss
provision during the period when the Third Party Administrative Services Agreement and this Policy
remain in effect, for each covered insured of the Plan Sponsor.
Spouse means any individuals who are lawfully married under any state law, including individuals
married to a person of the same sex who were legally married in a state that recognizes such
marriages, but who are domiciled in your policy’s state of issuance. Similarly, the term ‘marriage’ will
be read to include a same-sex marriage that is legally recognized as a marriage under any state law.
The terms ‘spouse’ and ‘marriage,’ however, do not include individuals in a domestic partnership.
(See definition for Domestic Partnership.)
Stop Loss Benefit means the excess risk coverage that provides protection for the Plan Sponsor
against a high claim on any one Covered Participant.
Stop Loss Premium means the fees due to PacificSource each month for the specific and
Aggregate Stop Loss insurance provided under the Stop Loss Provision section of this Policy. The
Stop Loss Premium shall be computed and paid in accordance with the Payment section of this
Policy.
Underwriting means the review of prospective and renewing cases for appropriate pricing, risk
assessment and administrative feasibility.
III. FEES SCHEDULE
The fees and costs payable for the services provided under this Policy shall be as follows:
Number Covered Participants on Effective Date 420
Specific Stop Loss Coverage: Yes
Policy Period 24/12
Claims must be Incurred and Paid within the following dates:
Claims Incurred from January 1st, 2023 through December 31st, 2024
Claims Paid from January 1st, 2024 through December 31st, 2024
Covered Expenses eligible for Specific Stop Loss Coverage include:
Medical Yes
Prescription Drug Card Yes
Dental No
Vision No
Specific Stop-loss Deductible per Covered Participant: $175,000
Aggregating Specific Stop-loss Deductible: Not applicable
Attachment 1 Page 30 of 36
PSGSL.OR.0115 Page 6 City of Springfield_0124
Plan expenses Incurred prior to the effective date of the Policy Period are limited to:
Not applicable
Specific Stop Loss Reimbursement Percentage in excess of Stop Loss deductible: 100%
Specific Stop Loss Monthly Premiums: Per employee per month
Composite $158.44
Specific Stop Loss Agent Commission: Not applicable
Are any Covered Participants lasered and assigned a higher Specific Stop-loss Deductible?
Not applicable
Specific Terminal Liability: Not applicable
Aggregate Stop Loss Coverage: Not Applicable
IV. STOP LOSS PROVISIONS
Individual Specific Stop Loss Deductible. Upon acceptance of proof of loss, PacificSource will
reimburse the Plan Sponsor for payments made by the Plan Sponsor that PacificSource determines
are Covered Expenses; provided that such payments exceed the Individual Specific Stop Loss
Deducible as shown in this Policy and are:
1. Incurred while the Plan is in force;
2. Paid for Covered Participants according to the terms of the Plan; and
3. Incurred during the Policy Period or during the Incurred Period and paid during the Policy
Period or during the Paid Period as shown in this Policy.
Payments for Covered Expenses that are eligible for more than one Policy Period will apply toward
the Policy Period in which Covered Expenses were actually Incurred.
The benefit reimbursed by PacificSource will be at the Reimbursement Percentage shown in this
Policy.
Individual Specific Stop Loss Deductible Exclusion and Limitations. The following exclusions
and limitations apply to all Individual Specific Stop Loss Deductible provisions.
PacificSource will not reimburse the Plan Sponsor for Paid Claims that:
1. Have been reimbursed by another insurance company or reinsurance company;
2. Are Incurred after the Individual Specific Stop Loss Benefit terminates;
Disclosure Statement. For new business, PacificSource Underwriting procedures requires the
Plan Sponsor to complete and sign a Disclosure Statement. Upon receipt of the initial individual
request for reimbursement, PacificSource will review the Disclosure Statement to determine if the
claimant is listed. When listed, PacificSource will continue with our normal pricing process. When the
claimant is not listed, PacificSource may review the documentation received with the claim
submission or request additional information to determine coverage and pricing. This form may also
be required at the time of reinstatement for terminated groups.
Attachment 1 Page 31 of 36
PSGSL.OR.0115 Page 7 City of Springfield_0124
Aggregate Reimbursement Maximum. This benefit applies only if indicated in this Policy.
Aggregate Reimbursement Maximum Benefit. Upon acceptance of proof of loss, PacificSource
will reimburse the Plan Sponsor for payments made by the Plan Sponsor that PacificSource
determines are Covered Expenses; provided that such payments exceed the Aggregate Stop
Loss Attachment Point for Paid Claims and are:
1. Incurred while the Plan is in force;
2. Paid for Covered Participants according to the terms of the Plan; and
3. Incurred during the Policy Period or during the Incurred Period and paid during the Policy
Period or during the Paid Period shown in this Policy.
Payments for Covered Expenses that are eligible for more than one Policy Period will apply toward
the Policy Period in which Covered Expenses are actually Incurred.
Reimbursement will be subject to the Incurred Limit or Paid Limit shown in this Policy.
The benefit reimbursement by PacificSource will be at the Reimbursement Percentage shown in
this Policy and will not exceed the Aggregated Liability Reimbursement Maximum shown in this
Policy.
Aggregate Stop Loss Attachment Point. The Aggregated Stop Loss Attachment Point is equal to
or the greater of:
1. The sum of the Aggregate Stop Loss Attachment Points for the Policy Period shown in
this Policy; or
2. The Aggregate Minimum Attachment Point shown in this Policy.
If the Aggregate Stop Loss Benefit terminates before the end of the Policy Period, the Minimum
Aggregate Margin Attachment Point is equal to or the greater of:
1. The sum of the Aggregate Stop Loss Attachment Points to the date of termination; or
2. The Minimum Aggregate Margin Attachment Point as shown in this Policy.
Calculation of the Monthly Aggregate Stop Loss Attachment Point. Aggregate Stop Loss
Attachment Point is calculated by multiplying the number of Covered Participants for that month
by the Aggregate Attachment Rates as shown in this Policy.
If any of the Covered Participants are absent from work due to strike, lock out, or work stoppage,
the number of Covered Participants will remain at the same level as the month before such
Covered Participants interruption began.
Aggregate Stop Loss Attachment Point Exclusions and Limitations. The following exclusions
and limitations apply to all Aggregate Stop Loss Attachment Point provisions.
PacificSource will not reimburse the Plan Sponsor for Paid Claims that:
1. Have been reimbursed by another insurance company or reinsurance company;
2. Are Incurred after the Aggregate Stop Loss Benefit terminates;
3. Have been reimbursed by under the Individual Stop Loss Deducible benefit;
4. Exceed the Aggregate Reimbursement Maximum Per Plan Year as shown in this Policy.
Attachment 1 Page 32 of 36
PSGSL.OR.0115 Page 8 City of Springfield_0124
V. GENERAL EXCLUSIONS AND LIMITATIONS.
PacificSource will not reimburse the Plan Sponsor for Covered Expenses Incurred by Covered
Participants that qualify as potential Large Claims, unless disclosed prior to policy issuance and
accepted by PacificSource.
In the event of nondisclosure by the Plan Sponsor, PacificSource reserves the right to:
1. Change or modify any all Stop Loss or Aggregate Premiums, Aggregate Claim Factors, or
Individual Specific Stop Loss Deductible level(s);
2. Adjust the terms of the Aggregate and Individual Specific Stop Loss Benefits; or
3. Adjust the Individual Specific Stop Loss Deductible of non-disclosed Covered
Participant(s).
PacificSource will not reimburse any loss or expense caused by, or resulting from, any of the
following;
1. Have been reimbursed by another insurance company or reinsurance company;
2. Payment for treatment or services which are considered experimental or investigational as
defined by the Plan;
3. Payment for treatment or services which are excluded as defined by the Plan; or
4. Deductibles, co-payment amounts, or any other charges which are not payable under the
terms of the Plan or charges which are payable to the Plan Sponsor from any other source.
5. Exceed PacificSource’s Aggregate Reimbursement Maximum Per Plan Year as shown in
this Policy.
Covered Participant Benefit Plan Changes or Amendments. PacificSource must be notified of
any change to the Plan. Notices of changes must be in writing and provided to PacificSource prior to
the effective date of the changes. PacificSource must approve changes in writing before the benefits
provided by the changes will be included as Covered Expenses and the Plan Sponsor has agreed
to pay any additional premium to accept a higher Aggregate Claim Attachment Rate(s) as a result of
the benefit change.
If notice is not received prior to the effective date of the change, PacificSource will determine the
date, if any, that the benefits approved by this change will be considered Covered Expenses.
If PacificSource does not approve a submitted change, PacificSource will not consider the benefits
provided by the change as Covered Expenses.
Only those Covered Expenses for benefits provided under the most current PacificSource approved
Plan will be considered for reimbursement.
Changes in Fees and Monthly Aggregate Stop Loss Claims Factor(s). PacificSource has the
right to establish new Stop Loss or Aggregate Monthly Premiums, and Monthly Aggregate Stop
Loss Claims Factor(s) each Policy Period.
PacificSource reserves the right to change the Stop Loss and Policy Fees and/or Monthly Aggregate
Attachment Factors for a Policy Period if the average Paid Claims for the last two Policy Months of
the immediately preceding Policy Period exceeds 125% of the average Paid Claims for all prior
Policy Months in that preceding Policy Period.
Attachment 1 Page 33 of 36
PSGSL.OR.0115 Page 9 City of Springfield_0124
PacificSource has the right to establish new Stop Loss and Aggregate Monthly Premiums, and
Monthly Aggregate Claims Factor(s) at any time during a Policy Period if:
1. The number of enrolled in Covered Participant changes by more than 10% from the
enrollment at beginning of Policy Period as shown in this Policy;
2. PacificSource discovers a Covered Participant who was not disclosed and whom
PacificSource determines to be an unacceptable risk; or
3. Any amendment is made to the Plan.
Adjudication of Claims. PacificSource will provide payment for benefits under the Policy, and the
direction of the Plan Sponsor, if the Plan Sponsor directs PacificSource to:
1. Pay a Claim, which in the opinion of PacificSource is not for a Covered Service according to
the Plan Document; or
2. Pay a Claim on behalf of an individual who, in the opinion of PacificSource, would otherwise
not be eligible for participation in the Plan.
PacificSource agrees to pay such Claims provided, however, that such Claim will not be included in
the accumulation of the Claims expense toward the Individual Stop Loss or Aggregate Stop Loss
Attachment Point. These claims will be a separate and additional liability of the Plan Sponsor, and
PacificSource will have no liability, either directly or indirectly, for such claims.
Should a dispute arise with respect to Claims paid under the paragraphs above, and should either
the Individual Stop Loss or Aggregate Stop Loss Attachment Point be reached by the inclusion of
the disputed Claims in the accumulation of the Claims expense, the Plan Sponsor and PacificSource
will meet and agree upon a procedure for submission of the dispute for decision by a neutral third
party, including the criteria upon which the third party’s decision shall be based, whereby the third
party will determine whether the disputed Claims should not be included in the accumulation of the
Claims expense. The cost of the neutral third party used in this procedure will be split equally
between the parties.
Third-Party Recovery. It is understood that the Plan, or the Plan Sponsor, may become entitled to
partial or full recovery from a third party with respect to a Claim paid under the Plan, whether directly
through subrogation or indirectly through reimbursement from the Covered Participant or otherwise
(“Recovery”), and that any Recovery by the Plan, and/or the Plan Sponsor, for Claims paid during
the Term of this Policy may occur during or after the Term of this Policy. Unless PacificSource has
agreed to perform such services as outlined in this Policy or a separate agreement, the Plan
Sponsor shall promptly undertake to prosecute any and all valid claims for such Recoveries that the
Plan may have against Covered Participants and/or third parties. It is agreed that the net amount of
such recoveries, whether recovered by the Plan Sponsor, PacificSource, or other third party,
remaining after deduction of the reasonable cost of prosecuting the recoveries, shall be treated as a
reduction of the Plan’s Claim expense as hereinafter provided. Such amounts, recovered during the
same Term or renewal Term of this Policy in which the related Claims were paid, shall be applied to
reduce the amount of Paid Claims applied toward the Specific Stop Loss and Aggregate Stop
Loss. Should this Policy have been terminated at the time one or more such recoveries occur, or if
the recovery or recoveries occur in a renewal Term after a Term in which (1) the related Claims were
paid and (2) PacificSource has reimbursed the Plan Sponsor for Claims reported in excess of the
Specific Stop Loss or Aggregate Stop Loss, the Plan Sponsor agrees to reimburse PacificSource
in the aggregate net amount recovered, up to the amount of such Claims paid by PacificSource.
Liability and Indemnification. Except as specifically provided in any rider or endorsement, attached
to and forming part of this Policy, PacificSource has no obligation to any third party. Our liability
under this Policy is limited to reimbursing the Plan Sponsor, pursuant to the terms of this Policy, for
Attachment 1 Page 34 of 36
PSGSL.OR.0115 Page 10 City of Springfield_0124
payments the Plan Sponsor makes on behalf of Covered Participants for expenses covered under
this Policy
Fiduciary Responsibility. PacificSource is acting only as a provider of insurance to the Plan
Sponsor. PacificSource is not and will not be considered to have any discretion in the administration
or management of the SFGHP’s operation. PacificSource assumes no obligation required by the
Employer Retirement Income Security Act (ERISA) of 1974, as amended.
PacificSource has no responsibility or obligation to directly reimburse any Covered Participant. This
Policy will not create any right or legal relationship between PacificSource and any Covered
Participant. PacificSource’s sole obligation under this Policy is to the Plan Sponsor.
VI. TERMINATION
Automatic
Unless specifically agreed to otherwise in a written amendment to this Stop Loss Policy, this Stop
Loss Policy shall automatically terminate as of the earliest of the following:
1. The end of the Policy period;
2. The effective date of any legislation which makes the Plan and/or this Policy illegal;
3. The date either party becomes insolvent, bankrupt, subject to liquidation, receivership, or
conservatorship; or
4. The termination date of the Plan, subject to any policy between the Plan Sponsor and
PacificSource regarding payment of benefits after the Plan is terminated.
Discretionary
This Plan may be terminated as of the earliest of the following:
1. By PacificSource upon the failure of the Plan Sponsor to pay any charges within ten (10)
business days after they are due and payable;
2. By PacificSource upon the failure of the Plan Sponsor to perform its obligations in
accordance with this Policy;
3. By the Plan Sponsor upon the failure of PacificSource to perform its obligations in
accordance with this Policy; or
4. By the Plan Sponsor in a written request
The Plan shall not be liable to reimburse the Plan Sponsor under Section III for any claims not
specifically defined in Section III.
VII. PLAN CONTACT INFORMATION
1. Any correspondence mailed to the Plan
Sponsor will be mailed to:
City of Springfield
Attn: Chaim Hertz
225 5th St
Springfield, OR 97477
Phone: 541-726-3724
E-Mail: CHertz@Springfield-OR.gov
Attachment 1 Page 35 of 36
PSGSL.OR.0115 Page 11 City of Springfield_0124
2. Any copy of correspondence and invoices
mailed to the Administrator will be mailed to:
City of Springfield
Attn: Christina Aaron and Deedee Judd
225 5th St
Springfield, OR 97477
Phone: 541-726-2242
E-Mail: CCasey@Springfield-OR.gov
DJudd@Springfield-OR.gov
3. Any correspondence mailed to PacificSource
will be mailed to:
PacificSource Health Plans
Attn: Sales
PO Box 7068
Springfield, OR 97475-0068
Phone: 541-686-1242
Fax: 541-485-0915
4. Any Enrollment Information, billing information,
and payments mailed to PacificSource will be
mailed to:
PacificSource Health Plans
Attn: Membership Services
PO Box 7068
Springfield, OR 97475-0068
Phone: 866-999-5583
Fax: 541-225-3642
E-mail: Membership@PacificSource.com
The Plan Sponsor agrees to notify PacificSource within twenty-four (24) hours of any changes to the
Plan Contact Information contained in this Policy.
IN WITNESS WHEREOF, Plan Sponsor and PacificSource have caused this Stop Loss Policy to be
executed in their names by their undersigned officers, who are duly authorized to do so.
“Plan Sponsor” “PacificSource”
City of Springfield PacificSource Health Plans
By:________________________ By:
Print:______________________ Print: John Espinola, MD
Title:______________________ Title: President and Chief Executive Officer
Date:______________________ Date: 12/18/2023
Attachment 1 Page 36 of 36